Los Angeles ? The co-founder of a prestigious New York law firm that made an estimated $250 million by filing class-action lawsuits against some of America’s largest corporations was indicted Thursday on charges that he conspired to pay kickbacks to people who agreed to be plaintiffs.

Melvyn Weiss is accused of two counts of conspiracy and one count each of obstruction of justice and making false statements in relation to documents that were the subject of a grand jury subpoena, the U.S. attorney’s office said. If convicted of all counts, he could face up to 40 years in federal prison.

In addition, Steven G. Schulman, a former senior partner at the Milberg Weiss firm, agreed to plead guilty to a racketeering conspiracy charge, prosecutors said. Schulman, 56, agreed in a plea deal Thursday to forfeit $1.85 million to the government and to pay a $250,000 fine, the U.S. attorney’s office said.

Prosecutors contend the firm secretly paid millions of dollars in kickbacks to get people to take part in more than 225 class-action and shareholder lawsuits, allowing its attorneys to be among the first to file litigation and secure the lucrative position as lead plaintiffs’ counsel.

The firm targeted some of the nation’s largest companies in litigation, including AT&T, Lucent, WorldCom, Sears, Roebuck, Microsoft, Prudential Insurance and Lincoln Savings & Loan.